Everybody’s talking about the multiple s-bombs dropped by Carl Levin yesterday during his public shaming of Goldman Sachs for, you know, sort of ruining the world’s economy, while facilitating a wealth transfer to the rich and powerful the likes of which hadn’t been seen in all of recorded history.
I was in the process of explaining my point of view to a friend (who’s no slouch, herself), that this type of hollow theatrics is dangerous because it serves to satisfy the public’s bloodlust, while simultaneously doing absolutely nothing of substance to solve the underlying problem, which in this case, is the government deregulation that allowed Goldman’s shenanigans in the first place.
It was at this point, that I began to search for Carl Levin’s vote on the 1999 Gramm-Leach-Bliley act, which repealed the depression era Glass-Steagall act, which had admirably served since 1933 to prevent banks from acting like fucking casinos. In my search for this confirmation, I discovered that, of course, Levin voted FOR the deregulation, and I also ran across this piece from Tyler Durden on Zero Hedge, where he makes the exact same point.
So, yeah, here you go…
Submitted by Tyler Durden on 04/27/2010 17:52 -0500
Does Goldman deserve the theatrical roasting it has been subjected to all day? Of course. Will anything come out of it? Not too likely, especially with our president, who made a whirlwind global tour on the Volcker Rule, and now is aggressively backtracking behind the shadow of his teleprompter (or at least until the next Massachussettes emerges, and the next, and the next). Yet in order to keep a fair and balanced perspective on things, it may behoove those watching Carl Levin’s sanctimonious monologues to realize that the November 4, 1999 vote on S. 900, better known as the Gramm-Leach-Bliley Act, received Senator Levin’s full endorsement. If Goldman is the pure, unadulterated evil it is today, it is so only because of idiotic Senators who were corrupt, or stupid enough, or both, to let GLB pass when it did, and usher in the era of unbridled prop trading/hedge funding by banks with full access to the discount window and taxpayer bailouts.
Any attempt at fixing Goldman must begin with reinstating Glass-Steagal – period. Anything and everything else is smoke and mirrors. Yes it will be painful (for the banks), and yes it will cost massive equity losses due to forced spin offs (for bank shareholders), but it will prevent the next scapegoating circus after the fact. How about we preempt these things from happening for once? That said, we applaud the 8 out of 100 senators who had the foresight to not sell their country’s future to the banking cabal.